The Democratic advocate., 1887-12-10


reached the sum of So, ,567 ,849.54.
The annual contributions to the sinking
fund during the three years above specified,
amounting in the aggregate to S138, ,05S, ,320.-
"a and deducted from the surplus as stated,
were made by calling in for that purpose
outstanding three per cent. bonds OF the
government.
During the six months prior to June 80,
1887, the surplus revenue had grown so large
by repeated accumulations, and it was feared
the withdrawal of this great sum of money
needed by the people, would so affect the
business of the country, that the sum OF
SIS, 1894, 100 of such surplus was applied to
the payment of the principal and interest OF
the per cent. bonds still outstanding. and
which were then payable at the option of the
government.
The precarious condition of financial af,
fairs among the people still needing relief,
Immediately after the 3Oth day of June, 1877,
the remainder of the three per cent. bonds
then outstanding, amounting with principal
and interest to the sum of 1887 800, were
called in and applied to the sinking fund
contribution fc- the current fiscal year.
Notwithstanding these operations of the
Treasury Department representations OF dis
tress in business circles not only continued
but increased, and absolute peril seemed at
hand.
In these circumstances the contribution to
the sinking fund for the current fiscal year
was at once complete by the expenditure of
$27 1854, ,2S3. So in the purchase of government
bonds not yet due bearing and a per cent
interest, the premium paid thereon averag-
ing about "a per cent. for the former and 8
per cent. for the latter.
In addition to this the interest accruing
during the current year upon the outstanding
bonded Indebtedness of the government was
to some extent anticipated, and banks
selected as repositories of public money were
permitted to somewhat increase the deposits.
THE AccUMULATING SURPLUS.
While the expedients thus employed, to
release to the people the money lying idle in
the Treasury, served to avert immediate
danger, our surplus revenues have Continued
to accumulate, the excess for the present
year amounting on the lst day of December
to S55, ,258, T0l. 10, and estimated to reach the
sum of S113, 100000 on the 30th of June
next, at which date it is expected that this
sum added to prior accumulations. will swell
the surplus in the Treasury to SAC, 200, 900.
There seems to be no assurance that, with
such withdrawal from use of the peoples
circulating medium, our business community
may not in the near future be subjected to
the same distress which was quite lately pro-
duced from the same cause. And while the
functions of our National Treasury should be
few and simple and while its best condition
would be reached, | believe, by its entire dis
connection with private business interests, yet
when, by perversion of its purposes, it idly
holds money uselessly subtracted from the
channels of trade, there seems to be reason
for the claim that some legitimate means
should be devised by the Government to re-
store in an emergency, without waste or ex-
travagance, such money to its place among
the people.
If such an emergency arises there now ex
lists no clear and undoubted executive power
Of relief. Heretofore the redemption of three
per cent. bonds, which were payable at the
option of the Government, has afforded means
for the disbursement of the excess of our rev.
enues; but these bonds have all been retired,
and there are no bonds outstanding the pay
ment of which we have the right to insist
upon. The contribution to the sinking fund
which furnishes the occasion for expenditure
in the purchase of bonds has been already
made for the current year, so that there is no
outlet in that direction.
THE POWER TO DISTRIBUTE THE SURPLUS.
In the present state of legislation the only
pretense Of any existing executive power to
restore, at this time, any part of our surplus
revenues to the people by its expenditure
consists in the supposition that the Secretary
of the Treasury may enter the market and
purchase the bonds of the government not yet
due, at rate of premium to be agreed upon.
The only provision of law from which such a
power could be derived is found in an appro-
priation bill passed number of years ago;
and it is subject to the suspicion that it was
intended as temporary and limited in its ap-
plication, instead of comforting continuing
discretion and authority.
No condition ought to exist which would
justify the grant of power to single official,
upon his Judgment of its necessity, to with
hold from or release to the business of the
people, in an unusual manner, money held in
the Treasury, and thus affect, at his will, the
financial situation of the country; and if it is
deemed wise to lodge in the Secretary Of the
Treasury the authority in the present iuncture
to purchase bonds, it should be plainly vest
ed, and provided, as far as possible, with such
checks and limitations as will define this off,
cial's right and discretion, and at the same
time relieve him from undue responsibility.
In considering the question of purchasing
bonds as means of restoring to circulation
the surplus money accumulating in the Treas
ury, it should be borne in mind that premiums
must of course be paid upon such purchase,
that there may be large part of these bonds
held us investments which cannot be pur
chased at any price, and that combinations
among holders who are willing to sell, may
unreasonably enhance the cost of such bonds
to the Government.
1t has been suggested that the present
bonded debt might be refunded at less rate
of interest, and the difference between the old
and new security paid in cash, thus finding
use for the Surplus in the treasury. The sue.
cess Of this plan, it is apparent, must depend
upon the volition of the holders ofthe present
bonds, aad it is not entirely certain that the
inducement which must be offered them would
result in more financial benefit to the govern
ment than the purchase of bonds, while the
latter proposition would reduce the principal
of the debt by actual payment instead of ex-
tending it.
The proposition to deposit the money held
| by the government in banks throughout the
country, for use by the people, is, it seems to
me, exceedingly Objectionable in principle, as
establishing too close relationship between
the operations Of the government treasury
and the business of the country, and too ex-
tensive commingling of their money, thus
fostering an unnatural alliance in private bus
mess upon public funds. If this scheme
should be adopted it should only be done as
a temporary expedient to meet an urgent ne
cessity. Legislative and executive effort
should generally be in the opposite direction
and should have tendency to divorce, as
much and as fast as can safely be dose, the
treasury department from private enterprise.
ExTRAvAGAyr APPROPRIATIONS.
0feourse it is not expected that unneces-
sary and extravagant appropriations will be
made for the purpose of avoiding the aeeu-
mutation of an excess Of revenue. Such ex-
penditure, beside the decentralization of all
just conceptions of public duty which it en-
tails, stimulates habit of reckless improvi.